from the flexible-pricing-packages-are-the-devil dept

For years, the United States has had an on again off again love affair with the idea of a la carte television -- or the ability to purchase only the channels you want to watch. After a ten-year debate, "common wisdom" appears to have largely decided against the idea, the public buying into the cable industry's argument that selling channels individually would: a) kill niche television channels and b) drive up the cost of cable. Of course, the cost of cable TV is climbing skyward anyway, and the Internet has become the perfect place for those niche channels to flee to. Frankly, I've always wondered why there's any hesitation when it comes to blowing up a sector in such dire need of meaningful disruption.

Thankfully, Canada has decided to go ahead and play the guinea pig for us in terms of exploring what an a la carte future would look like. After holding fifteen months of consumer hearings and waiting for years unsuccessfully for more flexible pricing options, Canadian regulatory agency the CRTC has decided to force the issue. The CRTC this week issued a ruling requiring not only that Canadian cable operators provide a discount $25 entry level core TV tier, but that above that, users are allowed to pick channels a la carte. In a statement, the CRTC explained it this way:

"Canadians, who choose to do so, will be able to supplement the entry-level television service by buying individual channels that will be available either on a pick-and-pay basis or through small, reasonably priced packages. If they so choose, they will have the option of selecting theme-based packages—such as sports, lifestyle or comedy—offered by their service providers.
By December 2016, Canadians will be able to subscribe to channels on a pick-and-pay basis, as well as in small packages. In addition, Canadians will have the choice of keeping their current television services without making any changes, if these continue to meet their needs and budgets."

Of course, the ruling is being met with all manner of hand-wringing from opponents of a la carte and the cable industry about how this is going to "destroy television as we know it." Canadian media has been flooded all week with stories about how this will only drive up costs, confuse consumers, harm the TV industry, result in cats and dogs sleeping together, and generally just wreak havoc on the TV ecosystem. Except, Canadian law professor Michael Geist points out that if you look past this breathy doomsday analysis in the press and actually ask real analysts, they point out the idea will probably save consumers money:

"Maher Yaghi of Desjardins Capital Markets says the changes could “lead to a reduction of $5 to $10 in monthly [revenue per user] as customers get the option to choose the channels they want to watch and move discretionary money toward OTT (over-the-top) services such as Netflix." Canaccord Genuity analyst Dvai Ghose suggests even bigger declines of $9 to $21 for some customers. In fact, Ghose notes that “current entry-level TV monthly prices for the large BDUs are as follows: Bell Fibe TV $45.95, Rogers Cable $40.48, Shaw $39.90 and Videotron $38.00 and Telus $34.00 ($29.00 if bundled).” A $25 service is obviously going to result in reduced spending for those consumers."

So yes, the claim that we should avoid a la carte TV because it will make TV bundles -- already seeing hikes many times the rate of inflation -- more expensive is just silly. So are the claims that forcing more flexible channel bundles on cable operators will somehow destroy quality television ("people will stop creating art if you don't help prop up our failing business model" has long been an entertainment industry rallying cry). While there are a few folks in the media who seem to get it, there's been a strange, overarching gushing adoration of the much-hated channel bundle in the media that's rather inexplicable, and in no way really tied to what consumers actually want. "Be careful what you wish for," the media logic seems to go, "or you'll pay a lot of money for cable television!" they bizarrely warn.

"Mr. Crull became angry with the CRTC’s so-called pick-and-pay decision last week.According to sources close to the network who spoke on condition of anonymity, Mr. Crull directed senior news staff at CTV, the country’s largest private broadcaster, to exclude Mr. Blais from coverage of the story on Bell-owned networks. The ruling will give consumers more freedom to choose individual TV channels as part of cable and satellite subscriptions, but it could also affect Bell’s bottom line."

After taking a media beating, Bell Media President Kevin Crull was forced to issue a mealy mouthed mea culpa stating he'd "learned a valuable lesson" about editorial control and really dumb decisions. Of course, Bell continues to insist the CRTC's move will only raise rates for consumers. Because, you know, cable TV rates weren't increasing under the current pay TV bundle model -- and keeping consumer prices low is every giant cable operator's top priority.

Meanwhile, those who've been claiming that a la carte TV will somehow destroy television as we know it now have an interesting petri dish to keep an eye on in Canada. Of course it's very possible the regulations are awful or at the very least accomplish nothing. I think one fair point made is the people most attracted to this "skinny bundle" may have already moved on to cheaper streaming options. Still, the CRTC has made it clear that after fifteen months of public hearings, this is what Canadian consumers have told them they want.

With consumers facing bi-annual rate hikes for an abysmal assortment of mediocre content and awful customer service -- isn't it time to at least start experimenting? I've always been confused by the hand wringing over consumer interest in a la carte, as if it's the consumer's job to somehow ensure that cable companies continue to make the sort of bloated profits they've long grown used to. Their only job is to demand quality product at a reasonable price, something cable companies across North America have been failing spectacularly at for more than a decade as they grow ever larger, consolidate, and then jack up programming rates as if it's going out of style.

Refusing to explore a la carte TV solely because we're worried it might harm the bloated profits of an apathetic TV industry makes little to no sense to me. These companies, in the U.S. and Canada alike, had a decade to adapt and have fought pricing and package evolution (not just a la carte but any package flexibility) tooth and nail every step of the way. Why not try something different? And if the cable companies and their 300-channel bundles of reality television dreck struggle to adapt to the one-two punch of regulatory intervention and competition from Internet video? Just maybe it was time for their ungracefully-aging business model to sail quietly into the sunset instead of pouting like a chubby, petulant child.

from the thank-goodness-for-section-230 dept

We've talked quite a bit about the importance of Section 230 of the CDA in the US, and how it protects internet sites from the actions of their users. Some have tried to downplay the importance of Section 230, arguing that it goes too far in protecting bad behavior, or even arguing that it has little impact on innovation. Yet, take a look at the situation in Italy, where regulators are now fining TripAdvisor because some people put up fake reviews on the site:

The American company, which allows travelers to rate hotels and restaurants around the world, has been fined 500,000 euros, or about $610,000, by an Italian regulator for not doing enough to prevent false reviews on its site.

The fine represents one of the first times that a review site has faced financial penalties in Europe or the United States for failing to clamp down on potentially false reviews.

The regulator, the Italian Competition Authority, called on TripAdvisor to stop “publishing misleading information about the sources of its reviews,” and gave the company 90 days to comply with the ruling.

Except, of course, it's not TripAdvisor "publishing" the "misleading information." It's TripAdvisor's users. This is the key point that we've made about Section 230: that it forces people to recognize the difference between a site and its users. In the past, we've even noted that we shouldn't even need a Section 230 because it should be common sense that you don't blame a site for the actions of its users -- but seeing how frequently people do that, the importance of Section 230 is quickly obvious.

TripAdvisor says it's going to appeal the decision -- as it should. Otherwise, it makes you wonder if TripAdvisor should bother doing business in Italy at all. And that would be a real shame. Just last year I visited Italy, and TripAdvisor was tremendously helpful in picking the hotel where I stayed (which turned out to be wonderful). Blaming and fining the site because some people misuse it seems like setting a really dangerous precedent.

from the seems-troubling dept

There were reports a few weeks ago that the European Commission has reopened its antitrust investigation into Google. The main issue is how Google promotes certain (usually internal) results in so-called "answer boxes" in a way that may hurt other sites. We've been skeptical of the idea of European bureaucrats deciding what Google's search results should look like, but earlier this year, it appeared that a settlement had been reached in which Google would point to competitors' results in some cases.

Against this backdrop, a few organizations, led by Yelp and TripAdvisor have created a somewhat fascinating site and tool called Focus On The User -- a play on Google's own core philosophy of "focus on the user and all else will follow." The site makes a very compelling argument that when Google is returning opinions (i.e., ratings) rather than factual answers, that it could do a much better job than just pointing to results from Google+. That is, if you do a search on "best restaurants in San Francisco" Google will show you results as rated by Google+ user reviews.

The Focus on the User site shows that rather than just relying on Google's own data, users would benefit greatly if Google used its own search algorithm to pull in results from reviews elsewhere. In short, where you might see a box up top with seven to ten reviews (all linking to Google pages), Yelp and TripAdvisor are arguing that if you just used Google's "organic" search algorithm to find the most relevant review pages, consumers get a much better experience. And they have a fair amount of data to back that up, showing a greater number of clicks in such a box (which you can test yourself via the site).

As noted above, the results are compelling. Using Google's own algorithm to rank all possible reviews seems like a pretty smart way of doing things, and likely to give better results than just using Google's (much more limited) database of reviews. But here's the thing: while I completely agree that this is how Google should offer up reviews in response to "opinion" type questions, I still am troubled by the idea that this should be dictated by government bureaucrats. Frankly, I'm kind of surprised this isn't the way Google operates, and it's a bit disappointing that the company doesn't just jump on this as a solution voluntarily, rather than dragging it out and having the bureaucrats force it upon them.

So while the site is fascinating, and the case is compelling, it still has this problem of getting into a very touchy territory where we're expecting government's to design the results of search engines. It seems like Yelp, TripAdvisor and others can make the case to Google and the public directly that this is a better way to do things, rather than having the government try to order Google to use it.

from the worldwide-censorship dept

We've been covering the ridiculous ruling in the EU on the "right to be forgotten," which was interpreted to mean that search engines could be forced to delete links to perfectly truthful stories (and even if those stories are allowed to be kept online). Google has been trying to comply with the over 90,000 requests it has received -- nearly half of which it has approved -- and removed from its European searches. The company has been struggling to figure out how to comply with the ruling, and those struggles continue. Originally, it was going to place a notice on search results pages where links had been removed (like it does with copyright takedowns) alerting people that stories were missing. However, regulators told Google that would defeat the purpose. So now, Google's European search results show a message on nearly every search on a "name" that results might have been removed.

Either way, once Google started removing the requested stories, it did the right thing, alerting the websites that links were being removed. Of course, that just resulted in many of those publications writing about it, and bringing the original news back into the public eye.

In response to all of this, European regulators are apparently quite angry again, summoning representatives from Google, Yahoo and Microsoft (but mainly Google) to argue that the removals should be global, not just for Europe and that the companies should stop informing websites if their stories were removed. One hopes that these three companies would fight strongly against either such proposal. The idea that Europe can dictate how search engines in other parts of the world work is dangerous. We've already noted that a Canadian court seems to think it has similar powers, and that's going to create a huge mess. Any time courts and regulators in one country think they can dictate how websites work in other countries, that is creating a massive jurisdictional mess (where contradictory rulings may run into each other), as well as allowing oppressive states to claim they, too, have the right to dictate how the web works in more open countries.

As for blocking sites from being informed, that would clearly go against basic transparency principles, and lead to yet another huge mess for websites which will (quite reasonably) wonder why their stories have gone totally missing from Google searches (especially if forced to extend it around the globe).

Of course, the real problem here is with the original ruling. The idea that public information that is widely disseminated already can magically be made private because someone thinks it's embarrassing and that it's no longer important is simply a ridiculous assertion in the first place. All of the problems that have come in implementing this are because the initial premise -- trying to disappear public information -- is so messed up.

from the bad-ideas-at-work dept

A year and a half ago, we thought this plan was dead in the water, but apparently while we weren't paying attention, a plan moved forward in Italy to take significant copyright enforcement powers out of the courts and, instead, give it to the Italian regulator AGCOM. If you want to see a recipe for a bad idea, this is it. Regulators are very much subject to regulatory capture, and a regulatory board entirely focused on copyright enforcement will almost certainly be controlled by maximalists who come from industry, rather than those with the public benefit in mind.

As it stands, the proposal is currently being reviewed by the EU to see if it complies with EU directives. A ruling in favor of the AGCOM plan would have a huge negative impact on Italy, innovation and culture.

If the initiative of AGCOM goes through, it will create an important precedent in Europe, since the enforcement of copyright in the Internet is normally carried out by courts, not by administrations.

ISPs, consumers, libertarians and experts have vigourosly contested AGCOM’s proposal because it could affect freedom of speech as well as business rights. In particular, they challenge the modality whereby the Italian regulator would supervise and tackle copyright infringements in the Internet by way of orders of removal and blocking. By contrast, rightshodlers associations as well as the Italian Collecting Society SIAE have supported the initiative.

The UN has already expressed its concerns about the proposal, noting that handing free expression controls to a regulatory agency, rather than an elected body, is a serious mistake, because if any content is to be removed from the internet, it should first be reviewed by a court. But the current proposal pretty much dispatches with the courts entirely in many cases, leaving the issues entirely up to regulators. Imagine if the US Copyright Office or the US Patent Office got to determine enforcement of those laws, rather than the courts. It would be a disaster for free expression and innovation -- and yet that's exactly what Italy is seeking to do.

Hopefully, the EU will reject this plan for stifling free expression and removing basic due process within the court system in Italy.

from the do-we-have-to-pick-one? dept

Regulators are conservative and dumb, and want to safeguard banks from bad risks even at the cost of preventing good risks,

Bankers are aggressive and smart, and want to take lots of good risks even at the cost of taking some bad risks, and

Sometimes bankers can find people to put up with their shit and sometimes they can’t.

“Put up with their shit” is meant in the broadest sense – Can banks defeat Dodd-Frank? Brown-Vitter? Is Lloyd Blankfein a hero or a villain? Jamie Dimon? Etc. – but one particularly interesting question is, if you’re trying to do trades that evade or bend or optimize or whatever regulation, will someone do those trades with you? You could write a history of recent finance with the answer to that question: in 2007 you could chuck all of your mortgage risk off-balance sheet via securitizations, in 2008 you … could not, and in 2013 if you’re looking for someone to provide regulatory capital relief all you have to do is call a Regulatory Capital Relief Fund. Six years peak-to-peak, same as the S&P.

You could probably use words like “bubble” in characterizing that cycle but I prefer the approach taken in this new NBER paper by Guillermo Ordoñez of Penn (free version here), both because it mathematically formalizes that basic model of regulation and counter-regulation in an interesting way, and because it is congenially cynical. As he puts it, “banks can always find ways around regulation when self-regulation becomes feasible, and it is indeed efficient for them to do so.” Bankers, of course, always think that it would be efficient for them to find ways around regulation. They only do so when they can find someone to trade with them.

The gist of the formalization is that banks can invest in “safe,” regulator-approved assets; in “superior risky” assets, which have a higher return than the safe assets for the same risk but which are not blessed by regulators1; or in “inferior risky” assets which have a higher upside but more risk than risky assets and are mainly a way for banks to implement moral hazard. Good banks want to invest optimally and care about the future, bad banks don’t care about the future and sort of maximize moral hazard. How they invest depends on economic fundamentals: if things are good then they invest optimally because there’s no need to take excessive risks; if things are terrible then they want to take excessive risks.2

Banks are constrained by two things. One is reputation: investors will trust a bank with a good reputation – that is, an observed history of taking good risks – and will fund it using unregulated shadow banking. The other is economic fundamentals, which investors can observe too: if fundamentals are bad and everyone knows banks will take excessive risks, then everyone demands the safety of deposit insurance (and regulation):

Why do investors agree on participating in shadow banking if they understand that banks are trying to avoid regulation that provides a safety net against excessive risk-taking? A potential answer is that indeed regulation and capital requirements are useless. However, if this were true, why would investors run from shadow to traditional banking when they become concerned about the quality of collateral?

I argue that reputation concerns lie at the heart of both the growth and the fragility of shadow banking. Shadow banking spurs as long as outside investors believe that capital requirements are not critical to guarantee the quality of banks’ assets, since reputation concerns self-discipline banks’ behavior. When bad news about the future arise, reputation concerns collapse because reputation becomes less valuable, and investors stop believing in the self-discipline of banks, moving their funds to a less efficient, but safer, traditional banking.

Like I said I find this paper very congenial but that’s in part because I feel like some people won’t. It rests in part on the assumption that bankers can observe superior-versus-inferior risky assets, and that regulators can’t. This is pretty intuitive – bankers are paid (more!) to make optimal investing decisions, regulators are paid (less!) to prevent risky investing decisions – and perhaps empirically supported – but, y’know, bankers are wrong sometimes too.

Also fun is Ordoñez’s proposal for a solution that steers between the dangers of unregulated banking and the inefficiency of blunt-instrument regulation:

Another, ideal but unfeasible solution, is to just give a high subsidy to all banks, regardless of their reputation φ, conditional on their repayment of the loans [i.e. conditional on their not defaulting] …. This naturally increases the cost of default for all banks and then allows for more self-regulation. This solution has the same effects as an exogenous increase of μ [i.e. expected economic conditions], but how does one finance these widely available subsidies?

Hahaha that’s “the best way to make banks safer is to give them such huge subsidies that surviving and getting the subsidies is more appealing than taking the risk of failing and losing the subsidies.” That seems … politically challenging,3 and so Ordoñez has some other proposals.4

For all fundamentals [below some minimum threshold] banks take excessive risk, even if … reputation suffers a lot from taking risks. Intuitively, future prospects are so poor that reputation concerns are irrelevant. Similarly, for all fundamentals [above some maximum threshold] banks invest optimally, even if … reputation does not improve from investing optimally. Here, future prospects are so good that firms are afraid of defaulting and getting a zero continuation value.

3.Though also, like, true? Cf. Gary Gorton on how banks historically accepted regulation in exchange for a “franchise value” coming from their monopoly on banking activity, and how shadow banking erodes that franchise value, as in this summary:

The second insight of Gorton’s on which this paper builds is the importance of statutory franchise value for the business model viability of at least some kinds of regulated financial entities. Where competition from unregulated entities is permitted, whether explicitly or de facto, capital and other requirements imposed on regulated firms may shrink margins enough to make them unattractive to investors. The result, as in the past, will be some combination of regulatory arbitrage, assumption of higher risk in permitted activities, and exit from the industry. Each of these outcomes at least potentially undermines the original motivation for the regulation.

4.Viz. to have bad-reputation banks pay for the subsidy (since they can’t shadow-bank anyway) and give it to the good-reputation banks (who do shadow-bank), which I don’t really understand (how does the regulator measure reputation?) but whatever that’s a minor quibble.

from the unfortunate dept

Back in June, we wrote about the European Telecommunications Network Operators Association (ETNO) and its "proposal" to basically tax the internet, which they're hoping the ITU will adopt later this year. The thinking here is not hard to figure out. These are old school (either state run or formerly state run) telco monopolies not used to having to compete or innovate. They look at the success of various internet companies, and get jealous and -- like the big entertainment legacy players -- start thinking "hey, some of that should be my money -- this is unfair!" And, so they come up with schemes and proposals like this -- trying to effectively get regulators to force a revenue shift from those companies that innovated and found business models that work, over to the lazy telcos who sat back, fat and happy with their monopoly, refusing to innovate. It reminds me of Andy Kessler's description of companies that create value vs. those that lock up value. One goes out and builds something new that the market wants... and the other runs to the government and asks them to put in place policies that divert revenue to them.

With that in mind, check out ETNO's latest proposal from ETNO for the ITU to consider (pdf) later this year. And you notice all sorts of questionable claims, all designed to basically say: we haven't adapted, and so regulators need to force money from actual innovators into our bank accounts:

The telecommunications market and the telecoms industry as a whole is undergoing a
fundamental shift. Catalysed by the availability of higher bandwidth connectivity, new
applications and services are being enabled that go far beyond the traditional services of
voice calling. In both the consumer and enterprise segments, services such as Voice over IP
(VoIP), social networking, instant messaging and the rise of ‘apps’ have changed the way
customers use their mobile and fixed connections. This development is significant and
telecoms operators need to adapt and rebalance their tariff structure between voice and
data services.

While broadband definitely is a key "catalyst" note how they set this up so that they can claim that it's really all about them... and then how the "tariff structure" needs to be "rebalanced." It's not about how they need to rethink their own business models or innovate or anything along those lines. It's about asking regulators to divert money that others are making to them.

The aim of the ETNO proposal is to contribute to the achievement of a more sustainable
model for the Internet. ETNO is not asking for increased regulatory intervention but aims to
establish a reference for commercial negotiations. The current interconnection model has
some shortcomings that need to be addressed. Today there is a huge disproportion amongst
revenues and a clear shift of value towards players (Over the Top players -- OTT) who are not
contributing to network investment. Traffic and revenue flows need to be realigned in order
to assure the economic viability of infrastructure investment and the sustainability of the
whole ecosystem. The revision of the ITRs offers a unique opportunity to propose high‐level
principles for IP interconnection.

Yup. "More sustainable" means "more money to the telcos." "Disproportion amongst revenues and a clear shift" towards online service providers is basically "the folks providing the services that make our connections valuable are making more money than we'd like, and we deserve some of that." And the idea that they're "not contributing to network investment" is a red herring. The big internet companies pay a ton for the bandwidth they use. And that money goes to the telcos. If they're not investing it in their networks, then perhaps they should explore why. Any time you hear a company say that "traffic and revenue flows need to be realigned in order to assure the economic viability," you know you're dealing with a company (or industry) that has failed to adapt and is asking the government to bail them out by taking money from those who did adapt. To claim that this isn't asking for regulatory intervention is laughable, since the whole process is one giant regulatory intervention. If this was just about commercial negotiations, this wouldn't be an issue. They'd just go out and negotiate.

ETNO believes that the revised ITRs should acknowledge the challenges of the new
Internet economy and the principles that fair compensation is received for carried traffic
and operators’ revenues should not be disconnected from the investment needs caused by
rapid Internet traffic growth. The ITRs should be flexible enough so as to further encourage
future growth and the sustainable development of telecoms markets, while respecting the
guiding principles that led to the successful development of the Internet: private sector
leadership, independent multi‐stakeholder governance and commercial agreements.
ETNO is certainly not asking for any change to the current Internet Governance model which
is based on private sector leadership and multi‐stakeholder dialogue.

Whenever a company is asking regulators for "fair compensation," it's basically them saying "our business model is flopping due to changes in the market, and we need you to prop us up." If ETNO really isn't asking for a change in the current internet governance model, then, um, why is it asking regulators to "rebalance" things and change who gets what cut of the revenue?

ETNO wants to avoid decisions that would prevent new business models from emerging or
that would hamper differentiated offers, hence limiting consumer choice. The risk of
undesirable economic and technical regulation of operator rates, terms and conditions will
be much higher if the development of the Internet continues to be jeopardized by the lack of
sustainability and/or by the lack of end‐customer satisfaction.

ETNO members have reiterated on many occasions their commitment to an open
Internet and to continue enabling consumers to access services and applications of
their choice as well as being completely transparent about terms, conditions and
limitations. As recognized by the European Commission, operators should not be
prevented from developing differentiated offers based on customer needs, in
addition to the best effort Internet. It is important to note that nobody will be cut
off from the Internet as the best effort Internet will continue to exist and to
evolve. New business models based on differentiated offers will ultimately create
more choice for consumers.

This is very close to "nice internet system you got there... you wouldn't want anything to, you know, happen, to it, now would you?" Basically, if regulators don't divert more money from successful internet companies to lazy telco monopolists, well, then we might just have to "jeopardize" the network.

There's a lot more like that in there. They're trying very, very carefully to use the language of "internet freedom" and innovation, in order to then explain why the ITU should put in place a proposal that effective forces local regulators to divert money from the companies who innovate, to the lazy monopolists. This is one of the reasons why so many folks interested in keeping the internet truly free and open are quite concerned about ETNO's proposal. It's not designed to benefit the internet or to encourage innovation. It's just designed to divert money from those who innovate to the telcos who haven't had to innovate.

from the required-classes dept

We've joked in the past that judges and politicians should be required to pass some sort of "class" on certain basic technology issues before they'll allowed to rule on lawsuits or create regulations having to do with technology. All too often we find that many of the problems created in the courts and legislatures are due to politicians simply not understanding technology. It looks like that's true around the world as well. Over in France, where politicians are pushing hard for a three strikes law, a reporter went and asked some politicians some basic questions to gauge their understanding of the technology in question -- and found that most had absolutely no clue. Combined with the fact that approximately 90% of people in a recent survey were against the law, and that the European Parliament has said any such law would be a violation of a user's civil rights, you have to wonder how politicians can possibly justify such a draconian law.

from the is-that-so-googley? dept

Microsoft's increasing regulatory headache from the European Commission concerns its Internet Explorer browser that comes standard with Windows. We've said before that this investigation is prima facie silly given the vibrant and increasing competition in the browser market, but it looks like things are just going to get worse for Microsoft. First, it was Mozilla deciding to complain that Microsoft was creating an unhealthy browser market by bundling IE with Windows. Now, Google is jumping onto the bandwagon and arguing that Microsoft's policy limits competition and harms innovation.

This is primarily problematic because the browser market is anything but uncompetitive. Firefox has created what is widely considered a better product, and, wouldn't you know it, gained considerable market share around the world (as high as 30% in some regions). More recently, Google introduced its own browser, Chrome, that launched to accolades and much user adoption. By introducing regulators into the browser market, these companies will all be distracted from providing users with the best possible product.

But what's even more confounding is Google's involvement. Obviously the company desires control of most browsers so it can set the defaults in its favor, but it is increasingly obvious that Google should not be bringing regulatory attention to the Internet -- especially when it comes to antitrust questions. Although claims of Google's "monopoly" are as specious as Internet Explorer's, making noise about antitrust is likely to come back and bite Google, especially given the rising number of political enemies they have.

from the just-go-out-and-compete dept

Last month, it seemed silly that EU regulators were pursuing Microsoft for antitrust violations in the browser market for bundling IE. It was clear that some of the initial complaints had come from Opera -- an also-ran in the browser market. However, it seemed silly because there is vibrant and growing competition in the marketplace. Firefox has continued to grow its market share, and in the past few years we've seen new entrants in the browser market from Apple and Google -- both of whom have established small, but significant footholds.

So, it's especially disappointing to read that the Mozilla Foundation appears to be siding with the regulators, complaining about Microsoft's actions. Obviously, Mozilla is competing with Microsoft in this space, so at a first pass it may seem in their best interests to lobby the EU to punish Microsoft. But it's disingenuous to say the least. Mozilla got where it did because it competed effectively. It built a better, more secure browser that many people made the choice to support over IE. In fact, Firefox's chief architect, apparently unaware of what his "bosses" were cooking up, seems to have recently contradicted the Mozilla Foundation's new position, where he admitted that he couldn't see how anyone with a straight face could claim that Microsoft's ability to bundle created a monopoly, noting that Firefox's success in growing marketshare showed that making yourself "demonstrably better" worked. Oops.